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FY22 Goal 1: Resolve Taxpayer Problems Accurately and Timely

Organizational Objectives

1
1.

Identify and propose recommendations to mitigate filing season, examination, collection, and tax administration issues to improve taxpayer service.

Status: Closed
Completion Date: 12/31/2021

Quarterly Update:
2nd Quarter: During the second quarter the Taxpayer Advocate Service’s (TAS) Local Taxpayer Advocates (LTAs) played a critical role in Congress approving an increased budget for TAS by meeting with congressional offices weekly, sharing the status and effect of the IRS backlogs on taxpayers, and providing the National Taxpayer Advocate’s (NTA) blogs and talking points.  The LTAs conducted virtual office visits during the Congressional Affairs Program (CAP) Conference and continued discussing the Annual Report to Congress (ARC), the Most Serious Problems (MSPs), and the Legislative Recommendations (LRs).  The LTAs focused their message on the 2021 ARC MSP “The Lack of Sufficient and Highly Trained Employees Impedes Effective Tax Administration” and 2022 Purple Book Legislative Recommendation “Revamp the IRS Budget Structure and Provide Sufficient Funding to Improve the Taxpayer Experience and Modernize the IRS’s Information Technology Systems.” All planned activities for this objective have been completed.

1st Quarter: The Taxpayer Advocate Service (TAS) completed working with the IRS on our recommendation for a robust online account system for individuals and practitioners to reduce the strain on IRS resources during the first quarter. We collaborated with IRS’ Online Services (OLS) division and addressed the need for robust online accounts for all taxpayers and tax professionals in the Annual Report to Congress (ARC) by publishing the Most Serious Problem (MSP) “IRS Online Accounts Do Not Have Sufficient Functionality and Integration with Existing Tools to Meet the Needs of Taxpayers and Practitioners.”

TAS will meet with congressional offices during our Congressional Affairs Program (CAP) conference to discuss the ARC’s MSPs, and Legislative Recommendations (LRs). This will allow the Local Taxpayer Advocates (LTAs) to emphasize the need for congress to provide the IRS adequate resources.  Further, in the 2021 ARC, the National Taxpayer Advocate (NTA) published the MSP “The Lack of Sufficient and Highly Trained Employees Impedes Effective Tax Administration” and 2022 Purple Book Legislative Recommendation “Revamp the IRS Budget Structure and Provide Sufficient Funding to Improve the Taxpayer Experience and Modernize the IRS’s Information Technology Systems” urging Congress to ensure the IRS has sufficient funding, staffing, and technology to provide a high level of service to taxpayers while protecting their rights.  TAS will continue to advocate for these recommendations during the second quarter.

 

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2.

Work with the IRS to identify opportunities to minimize refund delays for taxpayers whose legitimate tax returns are delayed by IRS fraud filters.

Status: Open
Completion Date: TBD

Quarterly Update:
2nd Quarter:
During the second quarter, the document upload tool (DUT) was expanded beyond congressional aides, to include taxpayers working with the original test office. Further, The Taxpayer Advocate Service (TAS) provided DUT training to all TAS employees and secured system access for employees to review and upload DUT received documents to TAS cases. Also, TAS leadership attended executive level collaboration meetings with the IRS’ Revenue Integrity and Correspondence Services (RICS) executives with oversight of the IRS fraud filters to provide feedback to minimize delays. TAS experts are engaged in varied project meetings to identify opportunities to minimize refund delays for taxpayers whose legitimate tax returns are delayed by IRS fraud filters. TAS will continue to work this activity during the third quarter.

1st Quarter: During the first quarter the Taxpayer Advocate Service (TAS) worked with the IRS to improve IRS correspondence for clarity by collaborating with IRS’ Online Services (OLS) Division to highlight the need to expand online account features and functionality to include all correspondence to taxpayers, integration of Where’s My Refund with more specificity of status and expansion of the IRS2Go to include all online account features and functions as noted in the most recent Annual Report to Congress (ARC). The 2021 ARC Most Serious Problem (MSP) “Transparency and Clarity: The IRS Lacks Proactive Transparency and Fails to Provide Timely, Accurate, and Clear Information” with corresponding legislative recommendation “IRS Online Accounts Do Not Have Sufficient Functionality and Integration With Existing Tools to Meet the Needs of Taxpayers and Practitioners” addressed these much needed improvements. ​Additionally, we worked with the IRS Return Integrity and Compliance Services (RICS) office to launch a pilot with Low Income Taxpayer Clinic staff to verify identities of taxpayers caught up in identity filters and to help get their refunds released. The submission process started in early December. Our attorney advisors also assisted in preparing clinicians by providing information about various letters and current IRS procedures for verification. We will continue to advocate for these recommendations with IRS as the need arises.

Additionally, we continued working with IRS on cross-functional teams to advocate for improved e-authentication methods for taxpayers who were selected by Identity Theft (IDT) filters. We reviewed Systemic Advocacy Management System (SAMS) submissions for potential systemic issues related to IRS’ deployment of the Secure Access Digital Identity (SADI) program. TAS representatives will continue our involvement in IRS actions by attending weekly cross-functional meetings between IRS and ID.me as well as bi-weekly meetings with Return Integrity Verification (RIV) Program Management headquarter staff to advocate for improvements.

We continued to advocate for the widespread use of the digital document upload portal or other technology that will allow taxpayers to securely submit identity and income verification documents electronically. During the first quarter, TAS began the rollout of the document upload tool and expect it to be completed in the second quarter.  Further, we are collaborating with the Business Operating Divisions (BODs) on the expansion.

Lastly, we continued reviewing our local cases and external submissions in SAMS to identify potential programming errors or taxpayer burden deficiencies with IRS fraud filters or the processing and release of refunds for those associated taxpayers. As appropriate, issues were elevated to subject matter experts to identify potential errors, and/or taxpayer burden deficiencies with IRS fraud filters or the processing and release of refunds to be shared with IRS.

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3.

Advocate for taxpayers requesting an opportunity for administrative review, issuance of a 30-day letter, review with the Independent Office of Appeals, and improved online tools.

Status: Closed
Completion Date: 03/31/2022

Quarterly Update:
2nd Quarter:
During the second quarter, the National Taxpayer Advocate addressed the appeal process for denied requests for abatement issue in the Annual Report to Congress’s (ARC’s) Most Serious Problem (MSP) “The IRS Processes Most Amended Returns Timely But Some Linger for Months, Generating Over a Million Calls That the IRS Cannot Answer and Thousands of TAS Cases Each Year.” We will continue to advocate for this issue as the need arises. All planned activities for this objective have been completed.

1st Quarter: During the first quarter, IRS removed any selectable paragraph in Letter 916C that states the law does not allow taxpayers to file a claim to reduce the tax they owe or appears to advise taxpayers they cannot seek an abatement of tax without first paying the amount of tax already assessed. The corresponding Internal Revenue Manual (IRM) section 21.5.3.4.6 has been revised to no longer suggest the use of this paragraph. The Taxpayer Advocate Service (TAS) continued to advocate for an appeal process for denied requests for abatement and made recommendations as appropriate by starting preliminary discussions with various stakeholders including Chief Counsel and the Independent Office of Appeals about possible revisions to the letter. We anticipate that securing approvals of the various Business Operating Divisions (BODs) who use the letter and making actual changes to the letter will be a multi-year effort.

Additionally, we continued to advocate for changes and updates to online tools such as Where’s My Amended Return? to give taxpayers necessary information about the status of their amended returns. The National Taxpayer Advocate (NTA) highlighted the need to make sure taxpayers have the option for an online view to be informed on tax return and refund processing, including more personalized status updates for Where’s My Refund? and Where’s My Amended Return? The Annual Report to Congress’ (ARC) Most Serious Problem (MSP) titled “IRS Online Accounts Do Not Have Sufficient Functionality and Integration with Existing Tools to Meet the Needs of Taxpayers and Practitioners” provided recommendations for these much-needed improvements. TAS will continue to advocate for any additional recommendations if they arise.

Lastly, we collaborated with the IRS on reviewing language to improve information provided to taxpayers online. TAS established a partnership and attended recurring meetings with IRS’ Online Service (OLS) and other IRS stakeholders to collaboratively improve these tools.

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4.

Work with the IRS with the goal of preventing Recovery Rebate Credit (RRC) and Advanced Child Tax Credit (AdvCTC) math errors in the next filing season.

Status: Closed
Completion Date: 3/31/2022

Quarterly Update:

2nd Quarter: During the second quarter, The Taxpayer Advocate Service (TAS) continued educating taxpayers through outreach opportunities.  Our Local Taxpayer Advocates (LTAs) completed nationwide outreach to educate taxpayers about filing season topics and ways to avoid common filing errors during 65 Pre-filing season events.  The topics included the Recovery Rebate Credit (RRC), the Advanced Child Tax Credit (ACTC), and additional filing season reminders to prevent delays in the processing of returns. Taxpayers were encouraged to file tax returns electronically and use IRS online resources to reconcile the RRC and/or ACTC payments.  In addition, LTAs partnered with the IRS to provide face-to-face assistance to taxpayers nationally during 20 Saturday taxpayer experience days.  Also, our leadership partnered with IRS during their Hearing All Voices events, to cultivate relationships with small business owners by educating about preparing for the filing season and listening to their tax issues.  TAS analysts completed our review of the 2021 RRC 1040 instructions and worksheets and found no errors in the instructions.  We will continue to monitor the RRC and ACTC and provide input as issues arise. All planned activities for this objective have been completed.


1st Quarter:
During the first quarter, The Taxpayer Advocate Service (TAS) educated taxpayers on how to compute the credit correctly to prevent errors and delays in processing 2021 returns for an Economic Income Payment (EIP) not received in 2021 and then claimed through the Recovery Rebate Credit (RRC). First, at the Low Income Taxpayer Clinic (LITC) Conference, we sponsored a session to discuss the RRC and identified likely problems that would occur. We then scheduled a collaborative meeting with IRS leadership on 12-16-21 to discuss questions and concerns raised by the Low Income Taxpayer Clinics (LITCs), which included questions and comments about the RRC and the Advanced Child Tax Credit (ACTC).  We included this information in our pre-filing season readiness outreach handouts and talking points. We will continue addressing these issues in the second quarter. TAS also reviewed the RRC Worksheet in the tax year 2021 Form 1040 Instructions and worked with the IRS to determine if clarification in computing the RRC is needed. TAS analysts continue reviewing 1040 instructions and worksheets to identify issues and we will update results during the next quarter.

TAS conducted research to identify the most common math errors for the RRC and worked jointly with the IRS to educate taxpayers on these issues. We developed and provided information to IRS which they used to update the IRS.gov frequently asked questions regarding the RRC. Also, TAS analyzed the RRC math errors and related programming to identify any procedural defects for RRC processing and propose corrections. The National Taxpayer Advocate included the MSP “Filing Season Delays: Millions of Taxpayers Experienced Difficulties and Challenges in the 2021 Filing Season” and Legislative Recommendation “Program systemic reconciliation capabilities for refundable credits such as the RRC, ACTC, Child Tax Credit (CTC), and systemic lookback capabilities to prior year modified adjusted gross income (AGI) where a taxpayer claims eligibility for tax credits that are based on prior year Adjusted Gross Income (AGI), such as the Earned Income Tax Credit (EITC) lookback rule, and any future tax benefits of similar nature and impact that have the potential to delay tax return processing and eliminate the need for manual reviews for computational adjustments.”

When appropriate, we submit recommendations for Internal Revenue Manual (IRM) updates through the normal reviews and the Out of Clearance Process. The TAS mission includes standard processes to submit recommendations for IRM updates through reviews and the out of clearance process. Opportunities to include recommendations may be presented throughout the year for taxpayers requesting an opportunity for administrative review, issuance of a 30-day letter, review with the Independent Office of Appeals, and improved online tools. We identified and submitted recommendations for IRM updates regarding the RRC and ACTC through the normal reviews and the Out of Clearance Process and integrated the actions into our normal work processes.

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5.

TAS will ensure the Child Tax Credit (CTC) Update Portal and periodic payments are accurate and timely.

Status: Closed
Completion Date: 12/31/2021

Quarterly Update:
1st Quarter:
During the first quarter, The Taxpayer Advocate Service (TAS) participated on Servicewide teams until the Child Tax Credit (CTC) Portal and CTC non-filer sign-up tool closed and periodic payments ended December 2021. We also collaborated with IRS to develop Internal Revenue Manual (IRM) updates, correspondence products, self-help guidance, and other materials to reflect the legislative mandates and procedures. The team completed updates to the IRMs, Forms, Publications and Letters dealing with the American Rescue Plan Act (ARPA).

Additionally, TAS worked with the IRS to develop targeted outreach for taxpayers and tax professionals regarding the options and benefits of the CTC Update Portal and the Non-Filers Sign-Up tool.  These topics were also included in the EITC day which was held the last week in January. All planned activities for this objective have been completed.

 

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6.

Continue to advocate to mitigate the unintended impact of the filing season postponements to taxpayers who timely file refund claims after filing timely returns for 2019 or 2020 pursuant to the postponements, but then have a shorter “look-back” period under IRC § 6511(b) and thus may not receive refunds.

Status: Open
Completion Date: TBD

Quarterly Update:
2nd Quarter:
The Taxpayer Advocate Service (TAS) continues researching and confirming cases with disaster coding which do not allow for the credit or refund under Internal Revenue Code (IRC) 6511 (b)(2)(A).  A draft summary briefing paper and new blogs are being developed to address this issue. 

1st Quarter: The Taxpayer Advocate Service (TAS) continued to advocate to mitigate the unintended impact of the filing season postponements to taxpayers who timely file refund claims after filing timely returns for 2019 or 2020. We worked the Refund Statute Expiration Date (RSED) issue concerning both disaster extensions and a high volume of tax year 2016 refund amounts being erroneously transferred to excess collections. Regarding the disaster extensions, TAS is researching to confirm that while the disaster “extension” allows the claim to be considered timely; any withholding “payments” over three years old are not available to be refunded. Regarding the high-volume of 2016 refund amounts, TAS confirmed with IRS that they have issued recent guidance to its employees to mitigate errors going forward. However, concerning the correction of accounts that have been impacted, IRS has not been able to correct the issue systemically causing taxpayers to lose refunds. We have elevated this issue to IRS leadership and are awaiting a response.

TAS has analyzed the possible negative impact on refund claims or other postponements including weather-related natural disaster relief provided during the last three filing seasons. The National Taxpayer Advocate is focusing an online blog article on this topic to educate and advocate for the issue. Further, we are analyzing possible negative impact on refund claims of other postponements. These actions have been integrated into our normal work processes and all actions related to this activity are closed.

The National Taxpayer Advocate issued a Taxpayer Advocate Directive (TAD), “Backlog of Unprocessed Amended Tax Returns,” which advocates for additional publicized administrative guidance to provide relief to taxpayers whose refund claims may be affected by other disaster relief postponements. The TAD directs IRS to “prominently post weekly processing updates on the IRS public website in a clear and unambiguous manner easily accessible to the public, to enhance transparency and promote the taxpayers’ right to be informed.”  Also, the National Taxpayer Advocate is publishing a blog related to this issue and we will continue to monitor, educate taxpayers, and advocate with the IRS as part of our normal work processes.

TAS has advocated for IRS to inform the public of the refund payment risks associated with the tax return due dates postponed in 2020 and 2021 to prevent denial or reduction of refunds because of the “look-back” rule and has communicated the risks with affected stakeholders. This issue was addressed in the 2021 ARC, including as part of a Legislative Recommendation.

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